Another round: Alcohol issues brewing again at Statehouse

Despite common public perception, Indiana’s alcohol laws are not outdated when compared to the rest of the country. Instead, Hoosiers are given extensive access beer, wine and liquor in big box stores — a fact that is not true in some other states.

Sen. Ron Alting, R-Lafayette, offered that defense of Indiana’s alcohol laws as part of a panel discussion about the work of the Alcohol Code Revision Commission during the Bingham Greenebaum Doll Legislative Conference earlier this month. Alting and former Republican Sen. Beverly Gard, who chaired the commission, spoke during the panel about the commission’s work and their predictions about possible revisions to Indiana’s alcohol laws during the upcoming legislative session.

The 17-member commission was given a two-fold task to complete in as many years: evaluate Indiana’s alcohol laws as they relate to retail and wholesale issues. This year the commission tackled retail issues during its seven meetings over the fall and winter months, including the possibility of allowing Sunday carryout sales and the expansion of cold beer sales beyond liquor stores.

Those issues were assigned to the commission on the heels of lengthy debates over Sunday and cold beer sales during the 2017 legislative session, with public opinion advocating for the expansion of alcohol sales to fight the perception that Indiana’s laws are behind the times. But while Hoosier alcohol regulations may need to be refined or updated in some respects, Alting asserted Hoosiers can more easily purchase beer, wine and hard liquor in Indiana big box stores than in other parts of the country.

Steps, barriers to expansion

Even so, the commission’s work this year focused largely on legislation that could expand the sale of alcohol even further in Indiana, including the possibility of Sunday carryout sales and a cold beer sales expansion.

According to the Old National Bank/Ball State University 2017 Hoosier Survey, 58 percent of Hoosiers support Sunday carryout sales. To that end, the commission adopted Preliminary Draft 3703, which would allow restaurants, liquor stores, grocery and convenience stores and pharmacies to offer Sunday carryout sales from noon to 8 p.m.

Drewry

Further, PD 3648 recommended alcoholic beverages be displayed in a designated area of a licensed store. A combination of PDs 3703 and 3648 will likely make its way through the Legislature during the coming session as a first step toward allowing Sunday sales, said Jennifer Drewry, of counsel in the hospitality and alcoholic beverage law group at Bose McKinney & Evans LLP.

Like Alting, Drewry has heard complaints about Indiana’s alcohol laws being outdated. But also like Alting, she believes Indiana is ahead of the curve in many alcohol regulations, such as those related to the craft industry.

She also said arguments insinuating the rest of the country has Sunday sales are a bit misguided, because each state can impose limitations on whatever sales it allows. The same applies to the expansion of cold beer sales, which 61 percent of Hoosiers support, according to the 2017 Hoosier Survey.

However, the commission did not give its stamp of approval to legislation expanding cold beer sales, and without the commission’s recommendation, Drewry said it is unlikely the General Assembly will act on cold beer sales this year.

Finding funding sources

One of the major barriers to expanding cold beer sales — and a barrier that almost kept Sunday sales from getting the commission’s recommendation — is the ability of the Indiana Alcohol and Tobacco Commission to ensure adequate regulation of and compliance with the new laws and licenses that would be issued if alcohol sales are expanded, Gard said.

As it stands now, the ATC is underfunded and understaffed, which means it would be difficult for its staff to adequately regulate the influx of new licenses that would come with expanded cold beer and Sunday sales, the commission members said. To remedy that issue, Alting said the Legislature needs to find mechanisms of boosting the agency’s enforcement abilities.

The commission put forth some recommendations for doing so by way of increasing fees and fines for licenses and infractions. For example, Preliminary Drafts 3809 and 3778 would increase excise taxes, dealer permit fees and fines to fund excise enforcement. Under PD 3809, excise taxes would increase to:

• 14.5 cents a gallon for beer and hard cider from the current tax of 12 cents;

• $3.35 a gallon for liquor and wine with at least 21 percent alcohol from the current tax of $2.68 a gallon, and;

• 59 cents a gallon for wine, from the current tax of 47 cents.

A designated portion of the funds collected through those increased excise taxes would be deposited into the enforcement and administration fund to be used to hire more excise officers, fund technology and implement equipment upgrades. An equal portion also would be deposited into the problem-solving court fund.

Similarly, PD 3778 would increase permit fees from $500 to $1,000 for dealers who sell only beer, wine or liquor; from $750 to $1,250 for a dealer that sells a combination of two alcoholic beverage types; and from $1,000 to $1,500 for retailers selling all three if the permit is issued after June 30, 2019. That preliminary draft also would increase fines for various permit infractions, with the funds equally divided between the enforcement agency and problem-solving courts.

Gard admitted the proposed increases in the preliminary drafts were shots in the dark, considering the commission did not have enough time during its seven-meeting schedule to perform an in-depth analysis of possible funding mechanisms. To that end, Alting said the legislature would be open to suggestions of other methods of raising additional funds for the ATC.

While Alting noted nobody likes to raise taxes, both he and Gard stressed the importance of implementing some sort of funding mechanism that can boost ATC resources. Drewry noted that it has been years since Indiana increased its permit fees, so she does not think it would be out of the question for the General Assembly to increase those fees.

Continuing the cold beer fight

Another stumbling block for cold beer sales expansion is one that rests in the hands of Hoosiers, not lawmakers, Gard said: public input. While interest groups were active participants in the commission’s process of hearing and considering evidence, only one group of lay citizens came to the statehouse to offer their opinions on cold beer expansion.

Based on the conversations she has in her community, Gard said public opinion seems to be strongly in favor of ending the perceived monopoly liquor stores have on cold beer sales. But if Hoosiers don’t come forward to share that support, the Legislature likely will not act on an expansion, she said.

Alting, however, said except for convenience store representatives, much of the testimony the commission heard was in opposition to a cold beer sales expansion. That led him to question whether supporters advocate for the expansion for public policy reasons, or for financial interests.

Further, Drewry said every alcohol permit can be viewed as a monopoly in its own way. That’s because each permit gives specific dealers specific privileges that may not be available to other dealers.

Regardless of the level of support, Alting and Gard agreed cold beer expansion legislation will likely not be passed this year. Lawmakers will begin considering the commission’s recommendations and other alcohol-related issues when they reconvene on Jan. 3.•